For solar shoppers these days, the price is right. Panel prices have fallen about 40 percent since the middle of last year, driven down partly by an increase in the supply of a crucial ingredient for panels, according to analysts at the investment bank Piper Jaffray.

The price drops “” coupled with recently expanded federal incentives “” could shrink the time it takes solar panels to pay for themselves to 16 years, from 22 years, in places with high electricity costs….

American consumers have the rest of the world to thank for the big solar price break.

Until recently, panel makers had been constrained by limited production of polysilicon, which goes into most types of panels. But more factories making the material have opened, as have more plants churning out the panels themselves “” especially in China.

“A ton of production, mostly Chinese, has come online,” said Chris Whitman, the president of U.S. Solar Finance, which helps arrange bank financing for solar projects.

Many experts expect panel prices to fall further, though not by another 40 percent….

John Berger, chief executive of Standard Renewable Energy, the company in Houston that put panels on Mr. Hare’s home, said that his second-quarter sales rose by more than 225 percent from the first quarter.

“Was that as a product of declining panel prices? Almost certainly yes,” Mr. Berger said.

Expanded federal incentives have also helped spur the market. Until this year, homeowners could get a 30 percent tax credit for solar electric installations, but it was capped at $2,000. That cap was lifted on Jan. 1.

Mr. Hare in Texas cited the larger tax credit, which sliced about $23,000 from his $77,000 bill, as a major factor in his decision to go solar, in addition to the falling panel prices. Sensing a good deal, he even got a larg er system than he had originally planned “” going from 42 panels to 64. The electric bill on his 7,000-square-foot house and garage has typically run $600 to $700 a month, but he expects a reduction of 40 to 80 percent.

If Best Buy had a big sale on Blu-ray discs, would you go out and buy a Blu-ray player? The energy markets are kind of like that “” natural gas is really cheap, for now, but does that does mean we should build infrastructure for a natural gas-fueled economy?

Bargains only last so long, even in this recession. Sorry, T. Boone Pickens.

To delve deeper, let’s examine why gas prices have deflated so much: Natural gas prices and oil prices are no longer bedfellows in our present economy. As crude oil has skyrocketed from about $30 per barrel in December 2008 to over $70, natural gas has plummeted from nearly $6 per million BTU to under $3, recently setting a seven-year low. To put these numbers in perspective, this makes oil over four times as expensive as natural gas to produce the same amount of energy, according to the U.S. government’s Energy Information Administration (EIA).

Long story short, this year we are going to have more natural gas than we need “” or potentially even store.

That’s no reason to party. Here’s why: Unlike the global crude oil market, the natural gas market is incredibly localized. The United States produces nearly 90% of what it consumes, and the rest is imported from Canada or from overseas “” the latterd amounting to only about 2.5% of U.S. consumption. Thus, a glut of domestic gas doesn’t really affect imports.

The biofuels revolution that promised to reduce America’s dependence on foreign oil is fizzling out. Two-thirds of U.S. biodiesel production capacity now sits unused, reports the National Biodiesel Board. Biodiesel, a crucial part of government efforts to develop alternative fuels for trucks and factories, has been hit hard by the recession and falling oil prices.

David Schoenbrod and Richard Stewart are right that a cap-and-trade policy will be good for our environment and our economy (“The Cap-and-Trade Bait and Switch,” Aug. 24). But we think history will show they are way off the mark in their criticism of the American Clean Energy and Security Act that recently passed the House.

There will be plenty of time next month for the Senate to debate a cap-and-trade policy, but some groups have already decided that the bill currently on the table is not an adequate solution to national energy and environmental concerns”and they’re making sure to speak up early.

Later today, more than 320 environmental and energy groups plan to deliver a letter to Calif. Sen. Barbara Boxer and her colleagues on the Senate Environment Committee that she chairs, arguing that the climate bill that the House narrowly passed in June is too diluted to reasonably curb carbon emissions and spur growth in renewable energy.

Letters of support or opposition constantly fly through the halls of Capitol Hill, but this one is bound to turn some heads for the sheer number of names on it. The broad collection of signatories”form the Center for Biological Diversity to the Southern Energy Network and a whole host of municipalities, faith groups and social justice organizations”lays out in short form exactly what a better bill should look like.

“A top priority must be to eliminate or greatly limit and restrict offsets,” which would allow carbon pollution to continue or even increase in some regions, the letter says. It also urges that the framework of the cap-and-trade program be more transparent, to limit how much big energy companies can manipulate the value of credits. And when it comes to setting limits and emission standards, the groups suggest overshooting current scientific projections, rather than falling short.

Worth a shot, but they are mostly lobbying the wrong people. It is the swing Senators, not Boxer and the Senate environment committee, who will determine how weak or strong the final bill is.

Speaking of biofuels – i read an article recently (on evworld, i think) that stated that it is much more efficient to grow a crop, burn it in a cofiring electric/heat plant and use the resulting electricity to power an electric car that try to make ethanol out of the biomass for an ICE. So why are we still trying to make biofuels at all?

With regard to 3 (and making a wild guess) farm equipment, construction equipment, airplanes? Efficiency and load-shifting (more trains, less planes, e.g.) can reduce the need, but there will still probably be uses for heavy equipment that is too big for electric or hybrid.